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BONUS: The management of Nanook Corporation is considering dropping product Y25C. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses
BONUS: The management of Nanook Corporation is considering dropping product Y25C. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $610,000 $244,000 $226,000 $171,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $117,000 of the fixed manufacturing expenses and $78,000 of the fixed selling and administrative expenses are avoidable if product Y25C is discontinued. Required: a. Do you recommend discontinuing product Y25C? Why or why not? b. If product Y25C had been discontinued, corporate profits for the current year would have decreased by what amount
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